Momentum for Satellite Direct-to-Device Hits Critical Mass Heading into 2025

Momentum for direct-to-device technology and services hit a critical mass in 2024. Of course, not everyone has it on their phone today, but public consciousness reached a new level last year with new phones adopting the service, and the high-profile, real-life use cases during the U.S. hurricane season in the fall.

The past year was full of new investments, new partnerships and service trials, regulatory developments, and more and more satellites functioning as "cell towers in space."

At this point, three generations of iPhones have offered the service, and a flagship Android phone adopted the feature with the Google Pixel 9, while mobile network operators (MNOs) like Verizon and AT&T increased their investments.

“This isn’t theoretical, it’s out there now,” says Globalstar CEO Paul Jacobs. “We can talk about where we go from here, but there's a model that's validated and the technology works. The fact that people are getting value by being rescued, that's all validated. We know this works."

Via Satellite spoke to a number of analysts and leaders in this space about the top milestones for direct-to-device adoption in 2024, and what issues they are watching as the market continues to develop.

The Interlocking Landscape

One of the interesting things about this market is the different approaches that make the service possible — whether it's available through a carrier or comes with a phone, and is standards-based or proprietary.

Apple has its “walled garden” proprietary solution with dedicated access to Globalstar's mobile satellite service (MSS) spectrum. Skylo and the recently formed Mobile Satellite Services Association take a standards-based approach to MSS.

On the other side, SpaceX, AST SpaceMobile and Lynk go the route of supplemental coverage from space — which requires a partnership with a mobile network operator and permission to use their spectrum. (Although just recently AST SpaceMobile struck a deal for some of Ligado’s licensed spectrum.)

Industry consultant Ivan Suarez says the Google Pixel adopting satellite connectivity through a deal with Skylo was one of the biggest signs in 2024 that the market is moving forward with a dynamic competitive landscape.

“Apple has their partner and then all of a sudden you have another OEM of a certain size doing the same thing that Apple is doing, but in a completely different way. They don’t have control over the operator that’s providing the service,” Suarez says. “No one really cared when Skylo was giving coverage to Bullitt. All of a sudden, it’s Google.”

Skylo works as an intermediary between the satellite operator and mobile network operators (MNOs), facilitating the service via MSS satellites through its tech stack. In 2024, Skylo announced it is supporting service for both the Google Pixel and for Verizon customers with compatible devices.

Skylo CEO Parth Trivedi describes the process of making this service possible as a “cascading set of unlocks.” This involves working with chip manufacturers like Qualcomm so that chipsets supports Sklyo certification requirements in line with 3GPP and MSS frequency bands, as well as unlocking the capability at the carrier and operating system level, like with Verizon and Android.

“We created the ecosystem, which is incredibly important,” Trivedi says. “We're not just a network service operator — we own and we control the tech stack. It also allows us to work with Qualcomm at the firmware level in their modems and allows us to work with Verizon at the core integration level.”

Trivedi said that all of these unlocks took years to reach, even though it looked like rapid progress with the pace of Skylo’s announcements in 2024.

“At the end of the day — the carriers, the OEMs — no one wants to deal with the complexity of these networks,” he adds. “We should shoulder the responsibility of abstracting away all of that complexity for them.”

One of the questions yet to be answered is what happens when these methods of providing service overlap. How does an iPhone 16 user with T-Mobile service get coverage, when both Apple and T-Mobile provide it?

In the case of Pixel 9 users with Verizon service, Trivedi tells Via Satellite that every Pixel user has access to baseline SOS messaging via satellite with or without a carrier. Verizon as a carrier adds peer-to-peer messaging and a consistent SOS experience across other Android devices.

In another instance, when New Zealand telco One NZ recently announced nationwide availability for messaging via satellite through Starlink, iPhones were not on the list of eligible devices.

Apple has not made any public comment about if iPhones will be compatible with Starlink’s direct-to-cell service with T-Mobile and other MNOs around the world. Suarez says he found the One NZ announcement interesting, but it isn't clear what it means for the big picture. If Apple does not make the service available on iPhones for MNOs working with Starlink, it could be very disruptive in the U.S. because of how popular iPhones are in the U.S., Suarez says.

“Why did companies like Apple refuse to be covered by supposedly one of the most advanced LEO systems for these types of services? What does that mean?” he asks.

These overlapping dynamics of device manufacturers, satellite operators, and MNOs have disrupted some of the power of the MNOs.

Lluc Palerm, research director for Analysys Mason, says Apple’s entrance into the market sparked worry among MNOs that they would miss the opportunity and spurred more of them to invest in solutions.

“The entrance of Apple and even Starlink is worrying mobile network operators because one would think that the gatekeeper for these services will be the mobile operator, because they own the subscriber,” Palerm says. “But with some of these well-known brands like Apple, they might eventually build a competing service to these mobile operators. The same way you have Apple music, you could have Apple coverage.”

The Politics of Spectrum

Sumaiya Najarali, senior consultant at Novaspace and project manager of the company’s direct-to-device market report, says one of the key milestones of 2024 was the FCC’s adoption of a first-of-its-kind regulatory framework, “supplemental coverage from space" (SCS). The SCS rules enable satellite operators to use the terrestrial radio spectrum of mobile network operators to fill wireless coverage gaps.

“The supplemental coverage from space framework builds more momentum in the D2C application,” she says. “When it starts to become an issue where regulatory bodies are getting involved and setting a foundation in terms of how it should all play out, then we can expect to see people taking the service more seriously. They are getting involved because it’s coming to fruition.”

Najarali expects the U.S. regulatory framework to influence regulators in other parts of the world as well.

In late November, the FCC granted its first approval under the new framework to allow SpaceX to provide SCS to T-Mobile.

But the FCC didn’t approve all of what SpaceX asked for. SpaceX requested a waiver from the FCC’s out-of-band power flux-density limit for SCS in order to provide higher bandwidth levels. A number of other operators objected to this ask, raising concerns about interference. The FCC deferred the request, requiring SpaceX to adhere to the stated limits.

But some question if SpaceX may get a more favorable answer with the administration change, when the FCC will be led by Republican Brendan Carr, who is seen as friendly to SpaceX and has criticized past FCC regulatory decisions that dealt with SpaceX.

“Either you build more sophisticated satellites with more careful interference design that would mean bigger antennas and more carefully designed RF interference, or you ask the FCC to change the interference rules,” Palerm says. “Will they manage to influence the FCC to be more flexible on that front? I don’t know. Elon Musk has a lot of influence in the FCC and the U.S. government, but it’s a big uncertainty.”

But politics and influence does not surpass the laws of physics, argues Gökhan Tok, senior manager of Space & Policy for Access Partnership.

“Nobody wants interference, this is the laws of physics” Tok says. “If there's interference, it is going to be obvious. No matter how friendly [the FCC] is to Starlink or Elon Musk, this will not change the facts. If there is interference, they cannot grant a waiver.”

A Geographic Puzzle

Cross-border interference is one of the primary concerns with using terrestrial spectrum in supplemental coverage from space. Despite the FCC’s adoption of the SCS framework, and Canada’s consideration of a similar framework, greater worldwide adoption is more complicated due to cross-border spectrum interference between smaller countries, Tok argues.

It’s easier for countries with large landmasses like the U.S. and Canada to approve service because of the limited number of neighbors to manage interference with. Island nations have a similar advantage, and Australia and New Zealand are moving quickly to roll out service with Starlink. Areas with more intricate borders, where neighbors may not cooperate, are more difficult, Tok says.

Europe is working on the issue in two ways. The European Conference of Postal and Telecommunications Administrations (CEPT), a body of all telecom administrators in Europe with 46 member countries, is working on a report that could be the first step of a framework for supplemental coverage from space and the EU is working on something similar.

“Developing a regulatory framework in Europe for this will take a couple of years,” Tok says. “It’s like an international agreement of European countries. It will take a couple of years and probably will be [ready] at the same time as WRC-27, or just before.”

Analysts note while much of the media focus is on western countries, China has made a lot of progress. According to the Novaspace report, 16 of the more than 20 phone models that are compatible with satellite service at the end of 2024 are from Asian or Chinese manufacturers like Huawei and Honor.

Palerm notes that China could have a big impact on the global marketplace. Brazil, for example, has signalled interest in LEO satellite services from China, with a recent MoU with SpaceSail.

“Obviously, China will have some challenges getting landing rights in some of the Western countries. But Latin America and Africa will be more than happy to offer Chinese service. They will be a very considerable competitor in the coming years for global markets,” Palerm says.

Where is the Money?

At this stage in the market when satellite-to-cell is a messaging service that is offered for free, the value is in swaying customers’ decisions on which device or plan to buy, or when to upgrade.

“If you have a large base of devices out there, getting people to buy their phone a little bit sooner with a new feature can generate a lot of value,” Globalstar CEO Jacobs says. “That model also says that the more effectively you can provide it, the less leverage you have to get off of that base of users. Being able to deliver this capability at low cost is super valuable.”

Some level of connectivity could become a baseline expectation for disaster situations, and also for MNOs to remain competitive with each other, Najarali says.

“When you’re an MNO technology player, you have to be at the forefront of technology. I think some MNOs will feel the pressure of that — we can't be the operator that doesn't provide satellite service from a competitive landscape perspective.”

Even if an MNO pays a satellite operator for capacity and offers the service for free, Najarali expects the price will be baked into the service plan, or factored into a progression of service plan prices.

Analysys Mason surveyed customers and found that more than 80 percent of customers who are considering switching mobile operators in the next few months see direct-to-device as a key decision-maker in terms of what new operator they choose, Palerm says.

And in the firm's global surveys, over 70 percent of respondents mentioned they were interested in satellite services on their phones, with a fairly high willingness to pay for the services.

“From a mobile operator point of view, you might think that the direct revenue opportunity is not great. But if you can get new subscribers and have better retention in your customer base, maybe it's worth launching even a limited service for building customer retention,” Palerm says. “That’s a huge value for the mobile operators.” VS